On behalf of her firm, Amanda H. makes frequent trips to Vietnam. She notices that she always mas to pay more dollars to obtain enough local currency to get her nails done in Vietnam than she has to pay to get them done in the United States. This is O consistent with purchasing-power parity if prices in the United States are rising less rapidly than prices in Vietnam. Oirrelevant, as Amanda H. will get her nails done regardless of the price. O inconsistent with purchasing-power parity, but might be explained by limited opportunities for arbitrage in manicuring services across international borders. O consistent with purchasing-power parity if prices in Vietnam are rising more rapidly than prices in the United States. Question 55 A Starbucks Grande Latte costs $3.75 in the U.S. and 28 yuan in China. The nominal exchange ate is 6.75 yuan per dollar. The real exchange rate is 1.106. If purchasing power parity held the nominal exchange rate would be lower. O 0.904. If purchasing power parity held the nominal exchange rate would be lower. 110 If purchasing power parity held the nominal exchange rate would be higher.

On behalf of her firm, Amanda H. makes frequent trips to Vietnam. She notices that she always mas to pay more dollars to obtain enough local currency to get her nails done in Vietnam than she has to pay to get them done in the United States. This is O consistent with purchasing-power parity if prices in the United States are rising less rapidly than prices in Vietnam. Oirrelevant, as Amanda H. will get her nails done regardless of the price. O inconsistent with purchasing-power parity, but might be explained by limited opportunities for arbitrage in manicuring services across international borders. O consistent with purchasing-power parity if prices in Vietnam are rising more rapidly than prices in the United States. Question 55 A Starbucks Grande Latte costs $3.75 in the U.S. and 28 yuan in China. The nominal exchange ate is 6.75 yuan per dollar. The real exchange rate is 1.106. If purchasing power parity held the nominal exchange rate would be lower. O 0.904. If purchasing power parity held the nominal exchange rate would be lower. 110 If purchasing power parity held the nominal exchange rate would be higher.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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